Field Notes Inside an Integrated Communications Agency

Although still valued by the group of 458 global senior managers surveyed, cost moved down in importance. Instead, corporations are starting to look at the entire value proposition as opposed to just straight-line cost savings. The difference is fairly dramatic. Respondents ranked the benefit of "increased effectiveness" 13 percent higher in 2007 than in 2006. Both "improved quality of service" and "overall business value" ranked 20 percent higher in level of importance over last year. Cost savings dropped 4 percent in level of importance from 2006.

Could it be the inconvenience of outsourcing has made us tired? A friend who manages offshore software developers believes so. He says external developers do not have proper context. This often results in work that misses the mark just enough to require significant rework. Unfortunately, this can mean missed deadlines and blown budgets. Hardly a cost savings.

Maybe we’re learning to outsource more effectively by allowing the external partner to be a counselor as opposed to simply doing the same function that once took place inside. Proctor and Gamble has documented innovation well by using the Not Invented Here model. They have learned to cherry pick the best resources to solve their toughest problems. Could be their financial model. They reward their outsource partners with a portion of the profit. That’ll get you vested quickly.

Finally, could it be that corporations are looking beyond the immediate? Wouldn’t that be impressive?

Whatever the reason, it’s clear companies that rely on partners like Capstrat are learning how to get real value out of the relationship. The deal is signed early, contracts control cost. The only thing left to differentiate one supplier from the next is the value they bring. Differentiation…what a concept. I couldn’t be happier.